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Vortex Company operates a retail store with two departments. Information about those departments follows. Department A Department B Sales Cost of goods sold Direct
Vortex Company operates a retail store with two departments. Information about those departments follows. Department A Department B Sales Cost of goods sold Direct expenses: Salaries Insurance Utilities Depreciation Maintenance $825,500 $444,500 410,000 288,925 118,000 85,000 19,500 10,400 24,000 30,000 19,500 12,500 6,800 5,500 The company also incurred the following indirect costs. Salaries Insurance Depreciation Office expenses $30,000 6,600 14,400 43,000 Indirect costs are allocated as follows: salaries on the basis of sales; insurance and depreciation on the basis of square footage; and office expenses on the basis of number of employees. Additional information about the departments follows. Department A B Square footage 32,200 13,800 Number of employees 70 30 Required: 1. Determine the departmental contribution to overhead and the departmental net income for department A and Department B. 2. Should Department B be eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the departmental contribution to overhead and the departmental net income for department A and Department B. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.) Direct expenses VORTEX COMPANY Departmental Contribution Statements Total direct expenses Allocated indirect expenses Total indirect expenses Operating income (loss) Department A Department B Required 1 Required 2 >
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